Testimony: The Belt and Road is Overhyped, Commercially

There are a number of easy myths to dispel about China’s Belt and Road Initiative. It’s worth trillions — false. China is buying up the participating countries — if so, only in self-defeating fashion. The Belt and Road Initiative (BRI) is primarily about transportation — reasonable but still mostly wrong.

Perhaps the most important mistake is that the BRI represents a growing Chinese footprint globally. It did in 2016, not now. More countries are joining the BRI in name but the extent of activity is shrinking. Moreover, inadequate foreign currency reserves means Beijing will be hard pressed to keep the BRI afloat as a global commercial effort. It is therefore likely to devolve toward a talk shop with substantial resources assigned only to a small set of priority countries.

The first implication for American policy of this likely BRI trajectory is: do not overreact. The second is to identify the much smaller group of countries China will favor going to forward. Our interests are very different than the PRC’s and the BRI does not appear to call for any substantial American response on economic grounds (only).